However, a UK consumer group warned phone users could face “unexpected charges”.

Until now roaming, or connection, charges have been added to the cost of calls, texts and internet browsing when consumers from one EU country traveled to another and connected to a mobile network there.

Image source Public Domain Pictures

In some cases, mobile users have faced huge bills if, for example, they have downloaded a movie.

The European Commission said in statement: “Each time a European citizen crossed an EU border, be it for holidays, work, studies or just for a day, they had to worry about using their mobile phones and a high phone bill from the roaming charges when they came home.”

It had been working hard over the last ten years to fix this “market failure”, it said.

“Eliminating roaming charges is one of the greatest and most tangible successes of the EU,” the Commission added.

The European Commission has opened an investigation into fast food giant McDonald’s tax affairs.

The investigation will focus on McDonald’s tax deals with Luxembourg.

According to the Commission, the deals allowed McDonald’s to avoid paying taxes in both Luxembourg and the US on royalties from Europe and Russia.

It follows similar investigations into tax deals made by Starbucks and Amazon with some authorities in Europe.

The Commission said two tax rulings given by the Luxembourg authorities in 2009 had allowed McDonald’s Europe Franchising to pay no corporation tax in Luxembourg since then, despite recording large profits. It added that in 2013, McDonald’s profits were more than €250 million.

Commissioner Margrethe Vestager, in charge of EU competition policy, said: “A tax ruling that agrees to McDonald’s paying no tax on their European royalties either in Luxembourg or in the US has to be looked at very carefully under EU state aid rules.

“The purpose of double-taxation treaties between countries is to avoid double taxation – not to justify double non-taxation.”

McDonald’s said in a statement: “McDonald’s complies with all tax laws and rules in Europe and pays a significant amount of corporate income tax. In fact, from 2010-14, the McDonald’s companies paid more than $2.1 billion just in corporate taxes in the European Union, with an average tax rate of almost 27%.

“Additionally, we pay social, real estate and other taxes. Our independent franchisees, who own and operate approximately 75% of our restaurants in Europe, also pay corporate tax and many other taxes.

“We are confident that the inquiry will be resolved favorably.”

Under the first tax ruling in March 2009, tax authorities in Luxembourg agreed to allow McDonald’s to pay no corporation tax on its European earnings in the country, as long as the food chain could prove that it paid tax on those earnings in the US each year.

This was done to avoid McDonald’s becoming subject to double taxation in the EU and the US.

It was subsequently discovered that McDonald’s earnings in the EU were not registered in the US for tax purposes, leaving McDonald’s no way to prove it had paid tax on its European royalties there.

A second tax ruling in September allowed McDonald’s to pay no tax in Luxembourg on its European earnings, without needing to prove it paid tax on those earnings in the US. The Commission said it planned to investigate whether this amounted to state aid.

The latest Commission investigation comes two months after it ordered Luxembourg to recover up to €30 million from Fiat Chrysler and the Dutch to do the same for Starbucks, because their tax deals were seen as unlawful aid.

According to the European Commission, 3 million refugees are likely to arrive in Europe by 2017 as the record influx via the Mediterranean continues.

The EU’s executive arm said the influx would have a “small but positive” effect on EU economic output, raising GDP by 0.2-0.3%.

The influx will raise the EU population by 0.4%, the Commission forecasts, taking account of failed asylum claims.

The flow of Syrian refugees to Europe shows no sign of abating, the UN says.

The weather in the Aegean Sea has got rougher with the onset of winter.

Conflicts and abuses in Iraq, Afghanistan, Eritrea and Somalia are also pushing people towards Europe.

The flow of refugees and other migrants from Turkey to Greece is expected to continue at a rate of 5,000 daily this winter, the UN refugee agency UNHCR says.

Delivering the EU’s autumn economic forecast, EU Economic Commissioner Pierre Moscovici said extra public spending and the extra labor supply from recognized refugees would lead to a small GDP rise in the EU as a whole.

However, the Commission cautioned that “the uncertainty surrounding the influx thus far and its future development is substantial”.

The Commission said the figure of three million was an assumption rather than a prediction and included those who had already arrived in 2015.

UN refugee officials say more than 750,000 refugees have arrived in the EU by sea this year, up from 282,000 in total in 2014.

The vast majority have arrived in Greece (608,000), which has become the most common destination. Some 140,000 have arrived in Italy in 2015.

Most of the refugees head for Germany, hoping to get asylum there. German officials say their country is likely to host at least 800,000 new refugees this year, and the total could reach 1.5 million.

Sweden has the highest share of refugees per head of population in the EU. The extra cost in public spending is likely to be nearly 0.5% of GDP this year, the Commission says, adding that “the corresponding positive effects on growth would be somewhat smaller”.

In a “state of the union” annual address in front of the European Parliament, European Commission President Jean-Claude Juncker has announced plans that offer a “swift, determined and comprehensive” response to Europe’s migrant crisis.

Under the proposals, 120,000 additional asylum seekers will be distributed among EU countries, with binding quotas.

It comes after a surge of thousands of mainly Syrian migrants pushed north through Europe in recent days.

Jean-Claude Juncker told the European Parliament it was “not a time to take fright”.

He was heckled by UK anti-European Union politician Nigel Farage, but dismissed his comments as “worthless”.

Germany, the main destination for many migrants, supports quotas, but some EU countries oppose a compulsory system.

Hungary – a key point on a migrant route – has been warned to expect an additional 40,000 migrants by the end of next week.

In a separate development Australia, which has been under pressure to do more to help displaced people, has announced plans to take in more Syrian refugees.

The Australian government said it would accept 12,000 Syrian refugees from persecuted minorities.

During his address, Jean-Claude Juncker outlined the priorities of the European Commission.

He opened his speech by admitting the European Union was “not in a good situation… There is a lack of Europe in this union, and a lack of union in this union”.

He said tackling the crisis was “a matter of humanity and human dignity”.

“It is true that Europe cannot house all the misery in the world. But we have to put it into perspective.

“This still represents just 0.11% of the EU population. In Lebanon refugees represent 25% of the population, which has just a fifth of the wealth of the EU. Who are we to never make such comparisons?”

Among Jean-Claude Juncker’s proposals:

EU member states to accept their share of an additional 120,000 refugees, building upon proposed quotas to relocate 40,000 refugees which were set out in May (though governments then only actually agreed to take 32,000)

A permanent relocation system to “deal with crisis situations more swiftly in the future”

Commission to propose list of “safe countries” to which migrants would generally have to return

Efforts to strengthen the EU’s common asylum system

A review of the so-called Dublin system, which states that people must claim asylum in the state where they first enter the EU

“It’s 160,000 refugees in total that Europeans have to take into their arms and I really hope that this time everyone will be on board – no rhetoric, action is what is needed,” Jean-Claude Juncker told the European Parliament.

The proposals will be discussed by EU home affairs ministers on September 14 in Brussels.

The new plans would relocate 60% of those now in Italy, Greece and Hungary to Germany, France and Spain.

The numbers distributed to each country would depend on GDP, population, unemployment rate and asylum applications already processed.

Countries refusing to take in migrants could face financial penalties.

The Czech Republic, Slovakia, Poland and Romania have opposed the idea of mandatory quotas.

On September 8, though, Poland appeared to soften its position. PM Ewa Kopacz said Poland would accept more migrants than the 2,000 it first offered to take.

Germany has welcomed Syrian migrants, waiving EU rules and saying it expects to deal with 800,000 asylum seekers this year alone – though not all will qualify as refugees and some will be sent back.

The mass migration has seen those seeking an end to persecution, conflict and hardship travel by boat, bus, train and on foot, from Turkey, across the sea to Greece, through Macedonia and Serbia, and then to Hungary from where they aim to reach Austria, Germany and Sweden.

European Union states have been asked to take in 40,000 asylum seekers from Syria and Eritrea who land in Italy and Greece over the next two years.

Under the European Commission’s latest plan, Germany, France and Spain would receive the most migrants.

The idea of using quotas to resettle those who have made it to Europe has caused controversy in some EU states.

The UK government says that it will not take part in such a system.

France, Spain, Hungary, Slovakia and Estonia have also all voiced concerns, and a final decision will be taken by EU governments after a European Parliament vote.

Denmark has the right to opt out of the plan while Ireland and the UK can decide whether they wish to opt in.

The plan applies to Syrian and Eritrean nationals who arrive in Italy or Greece after April 15, 2015. The European Commission said it could also apply to Malta if it also faced a sudden influx of migrants.

This is in addition to moves announced earlier this month by the EU for a voluntary scheme to settle 20,000 refugees fleeing conflict who are currently living outside the EU.

Of the 40,000 migrants considered “in clear need of international protection”, the Commission says:

Germany would take in 8,763 (21.91%)

France would take in 6,752 (16.88%)

Spain would take in 4,288 (10.72%)

Dimitris Avramopoulos, the home affairs commissioner, said it was not proposing “the fixing of quotas… for migration in general” and but it was “up to each member to decide how many refugees they will grant refugee status [to]”.

“We only propose – and we insist on that – a fair distribution of a concrete number of migrants in clear need of international protection across the European Union,” he said.

Countries would receive €6,000 ($6,600) for every person relocated on their territory under the latest proposal, the commission said.

More than 1,800 migrants have died in the Mediterranean in 2015 – a 20-fold increase on the same period in 2014.

Some 60,000 people have already tried to make the perilous crossing this year, the UN estimates.

Many are trying to escape conflict or poverty in countries such as Syria, Eritrea, Nigeria and Somalia.

The European Commission said Italy and Greece were facing an exceptional level of migration, with Italy seeing a 277% rise in irregular border crossings from 2013 to 2014 and Greece seeing an increase of 153%.

UN chief Ban Ki-moon has also urged Europe to do more to help migrants, calling for search-and-rescue operations in the Mediterranean to be “further strengthened”.

Earlier this month, EU ministers backed plans for a naval force to set up to combat smuggling gangs, if necessary by military force, inside Libyan territorial waters.

EU countries should take in refugees under a quota scheme, according to a European Commission proposal.

According to the UN, 60,000 people have already tried to cross the Mediterranean in 2015.

Migrants are being driven to make the journey by “horrific abuse” in Libya, Amnesty International says.

More than 1,800 migrants have died in the Mediterranean only in 2015, a 20-fold increase on the same period in 2014.

Photo AP

The European Commission’s migration policy, to be announced on May 13, will also propose organizing legal means for migrants to come to Europe so they do not turn to traffickers.

However, it will need to be agreed by EU states.

European leaders will discuss the proposals at a summit at the end of June.

The measures proposed by the European Commission are the latest in a series of steps designed to stop migrants drowning in the Mediterranean.

More than 200,000 migrants fleeing conflict or poverty from countries such as Syria, Eritrea, Nigeria and Somalia are estimated to have crossed the Mediterranean in 2014, with thousands dying making the journey.

Quotas would be determined using a number of factors, including a country’s population, economic indicators and the number of asylum seekers previously accepted.

Germany keenly supports the idea of quotas, having received 200,000 asylum applications in 2014.

Countries such as Italy and Malta, where large numbers of migrants arrive by boat, have also called for EU members to share responsibility for migrants more evenly.

Austrian Chancellor Werner Faymann has described a quota as “a question of fairness”, adding that asylum is “not an act of mercy but a human right”.

However, other EU countries are fiercely opposed to the idea of quotas.

Leaders in Hungary, Slovakia and Estonia have also objected to a quota system, with Hungarian PM Viktor Orban calling it “a crazy idea”.

McDonald’s could be facing a European Commission (EU) investigation into its tax affairs.

EU competition commissioner Margrethe Vestager said she is looking into trade union allegations that McDonald’s avoided paying more than €1 billion ($1.1 billion) in corporate taxes between 2009 and 2013.

Margrethe Vestager said her office is “looking into the information gained by trade unions when it comes to McDonald’s in order to assess if there is a case.”

The coalition of European and US unions claims that McDonald’s reduced its tax burden by moving its British headquarters to Switzerland and then channeling money into a Luxembourg-based subsidiary that also had a Swiss branch.

The unions said the Luxembourg offshoot had revenues of €3.7 billion over the five-year period but reported paying €16 million in taxes.

McDonald’s maintains that it has complied fully with EU tax law.

The EU has been cracking down on what it sees as aggressive tax avoidance by multinational companies, last year opening investigations into Apple in Ireland, Starbucks in the Netherlands, and Amazon in Luxembourg.

The EU’s new anti-monopoly chief, Margrethe Vestager, said the Commission had found that Gazprom “may have built artificial barriers preventing gas from flowing from certain Central European countries to others, hindering cross-border competition.

“Keeping national gas markets separate also allowed Gazprom to charge prices that we, at this stage, consider to be unfair.

“If our concerns were confirmed, Gazprom would have to face the legal consequences of its behavior.”

Brussels’ competition authority has the power to impose fines of up to 10% of Gazprom’s global turnover.

The EC questioned the formulae Gazprom used to come up with the different prices at which it sold gas to individual countries.

“Gazprom’s specific price formulae, which link the price of gas to the price of oil products, seem to have largely favored Gazprom over its customers,” it said.

The Commission said that, in its preliminary view, Gazprom was hindering competition in the gas markets in eight Central and Eastern European member states – Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia.

Russia supplies about a third of the EU’s gas requirements, with half that amount going through pipelines that cross Ukraine.

The newly elected president of the European Commission, Jean-Claude Juncker, has denied allegations he encouraged tax avoidance when he was Luxembourg’s prime minister.

Jean-Claude Juncker, 59, said there was “nothing in my past to indicate that I wanted to encourage tax evasion”.

He has come under pressure over claims that some 340 global companies were granted deals to help them avoid tax during his 18 years in office.

The Commission has begun an investigation.

Jean-Claude Juncker has denied allegations he encouraged tax avoidance when he was Luxembourg’s prime minister

Jean-Claude Juncker, 59, took over as president of the Commission at the start of November and was confronted within days with a report by investigative journalists that alleged that companies such as Pepsi and Ikea had made deals with his country’s government to save billions in tax in other countries.

Incumbent PM Xavier Bettel was quoted as saying all deals abided by international tax rules, although Jean-Claude Juncker made no comment at the time.

In an unexpected appearance before journalists on November 12, the Commission President repeated the message.

“Everything that has been done has been in compliance with national legislation and international rules that apply in this matter,” he said.

The European Commission will press Luxembourg over new allegations it offered tax breaks for more than 300 global companies, an EU spokesman says.

Pepsi and Ikea are among those accused of making deals with Luxembourg to save billions in tax in other countries.

The revelations were published in a report by the International Consortium of Investigative Journalists (ICIJ).

Luxembourg is already under investigation by the EU over suspected “sweetheart” tax deals with online retailer Amazon and the financing arm of carmaker Fiat.

Two other member states, Ireland and Malta, are also being investigated as part of the EU’s crackdown on multinationals’ tax avoidance schemes.

Luxembourg PM Xavier Bettel has insisted that the deals abided by international rules on tax, in comments reported by AFP news agency.

The European Commission will press Luxembourg over new allegations it offered tax breaks for more than 300 global companies

The ICIJ said a team of 80 journalists had pored over nearly 28,000 pages of leaked documents showing tax agreements and returns relating to more than 1,000 businesses.

It says the companies created “complicated accounting and legal structures that move profits to low-tax Luxembourg from higher-tax countries where they’re headquartered or do lots of business”.

In some cases, it adds, companies enjoyed tax rates of less than 1% on profits moved into the European duchy.

“The Duchy of Luxembourg has a legitimate government that has to provide answers to the investigation opened by the Commission,” the EU Commission’s spokesman Margaritis Schinas told reporters on November 6.

When pressed repeatedly about Jean-Claude Juncker’s role in the probe, Margaritis Schinas said that EU Competition Commissioner Margrethe Vestager would take charge of the current investigation.

“She will request the appropriate information, enforcing the rules, as is the duty of the European Commission,” he added.

The European Commission will launch a formal investigation into Apple in relation to tax arrangements with three EU countries (photo AFP)

The investigations will focus on “transfer pricing”, or whether the countries allowed the multinational companies to charge one part of the company over the odds for goods or services from another part of the company as a way of shifting profits.

Under Commission rules, companies must charge their subsidiaries market rates.

Sanctions for a breach of tax rules could include an attempt to claw money back from Apple, Starbucks and Fiat.

Apple said that it had not had “any special tax deal with the Irish government”.

“We have received no selective treatment from Irish officials,” the company said.

“Apple is subject to the same tax laws as scores of other international companies doing business in Ireland.”

The Irish finance ministry said Apple “did not receive selective treatment and there was no <<special tax rate deal>>”.

“Ireland is confident that there is no state aid rule breach in this case and we will defend all aspects vigorously,” the Department of Finance said.

Last year’s US Senate committee investigation revealed that Apple had been able to funnel profits into Irish subsidiaries or “ghost companies” that had no declared tax residency anywhere in the world, cutting billions from its tax bill.

The Senate committee hearing revealed that Apple designated its Irish entities as unlimited companies, which meant it did not have to publish annual accounts.

The Irish arrangement allowed Apple to pay just 1.9% tax on its $37 billion in overseas profits in 2012, despite the fact the average tax rate in the OECD countries that make up its main markets was 24% last year.

In a 40-page memorandum, the Senate committee said: “Ireland has essentially functioned as a tax haven for Apple.”

Coffee giant Starbucks has been embroiled in a tax controversy for a number of years.

In 2012, the multinational admitted that it had a special tax deal with the Dutch government which allowed it to transfer money to its Dutch sister company in royalty payments.

Starbucks said on Wednesday that its Dutch tax arrangements conformed with financial law.

“We comply with all relevant tax rules, laws and OECD guidelines and we’re studying the Commission’s announcement related to the state aid investigation in the Netherlands,” a Starbucks spokesperson said.

The Dutch finance ministry said it was confident that its tax system was “robust”.

The European Commission has fined eight banks a total of 1.7 billion euros for forming illegal cartels to rig interest rates.

The cartels operated in markets for financial derivatives, which are products used to manage the risk of interest rate movements.

Two of the eight, Barclays and UBS, were excused their financial penalties for revealing the cartels’ existence.

The European Commission it was shocking that competing banks were in collusion.

UBS and Barclays stood to pay the largest fines of 2.5 billion euros and 690 million euros, but avoided paying anything because they assisted the investigation.

A number of banks were engaged in the rigging of interest rate products intended to reflect the cost of interbank lending in euros, while another group fixed prices for products based on the Japanese yen.

The rates are used to set the price of trillions of dollars of products, including mortgages.

The European Commission has fined eight banks a total of 1.7 billion euros for forming illegal cartels to rig interest rates

Some were involved in both markets and more than one cartel, including RBS, which was fined a total of 391 million euros.

Aside from RBS, Barclays and UBS, the other organizations involved were Deutsche Bank, which received the biggest fine of 725.36 million euros, Societe Generale, JP Morgan, Citibank and the brokers RP Martin.

Banks that have not yet settled fines but are being investigated are HSBC and Credit Agricole, as well as JPMorgan, which accepted a fine for rigging in one market but not another.

The fine, the first for interest-rate rigging from the EU, is also a record for its regulators.

The European Commission is suing Spain over the refusal of some of its hospitals to recognize the European Health Insurance Card (EHIC).

The EHIC entitles EU citizens to free healthcare in public hospitals.

But some Spanish hospitals rejected the card and told tourists to reclaim the cost of treatment via their travel insurance, the European Commission says.

It is not accusing cash-strapped Spanish hospitals of trying to make money.

The European Commission is suing Spain over the refusal of some of its hospitals to recognize the European Health Insurance Card

The Commission, which checks compliance with EU law, has requested information on the issue from the Spanish government – the first stage of an infringement procedure which could eventually result in a fine.

Under the health card system, an EU citizen’s home health service is supposed to cover the cost of emergency treatment abroad.

The EHIC is mainly intended for emergency treatment abroad, but also covers patients for pre-existing medical conditions. In cases where doctors think a European visitor’s treatment can wait until they get home then the EHIC can be deemed invalid.

The EHIC is intended to give foreign visitors the same level of care in emergency cases as locals get.

The Commission says it has had hundreds of such complaints concerning Spain. It says the much higher cost of private treatment is being passed on to the travel insurance companies “or, increasingly, is being billed to the citizens directly”.

The European Commission has announced it will allow some EU member states to slow their pace of austerity cuts, amid concerns over growth.

France, Spain, Poland, Portugal, the Netherlands and Slovenia are all being given more time to complete their austerity plans.

France will get two more years to bring its budget deficit below 3% of GDP.

European Commission President Jose Manuel Barroso said the extra time must be “used wisely” to lift competitiveness.

The measures came as part of the European Commission’s country-specific recommendations.

Spain, Poland and Slovenia will also get two more years to bring down their budget deficits though spending cuts and tax increases.

The Netherlands and Portugal are having their timetables extended by one year.

Even Europe’s stronger economies, including Germany, are being urged to allow wage increases and increase flexibility in the jobs market to improve competitiveness.

Europe remains broadly in recession. The 17-member eurozone shrank by 0.2% in the first three months of the year, and is expected to register negative growth for 2013 as a whole.

The European Commission has announced it will allow some EU member states to slow their pace of austerity cuts, amid concerns over growth

There has been concern that the focus on fiscal consolidation in many EU states has worsened the economic situation.

Earlier, the OECD called on the European Central Bank (ECB) to do more to boost growth.

This month, the central bank in Frankfurt cut interest rates to a record low of 0.5% and said it was “ready to act if needed”.

In an official statement, the Commission said the extra time should be used to enact reforms.

“Giving more time for certain member states to meet their agreed objectives is designed to enable them to accelerate efforts to put their public finances into order and carry out overdue reforms,” it said.

“Reform efforts must be stepped up to credibly produce the required outcomes within the new deadlines and excessive deficits must be corrected.”

Jose Manuel Barroso stressed that the decision to allow some member states to slow the pace of austerity was made on purely economic and financial grounds, rather than for political reasons.

Speaking about the new timetable for France, he said the message remained “very demanding”.

“The extra time should be used wisely to address France’s failing competitiveness … I believe there is a growing consensus now in France about the need for those reforms,” he said.

Figures released earlier this month showed that France had entered its second recession in four years after the economy shrank by 0.2% in the first three months of 2013.

The European Commission is investigating MasterCard over fees charged for card transactions made by people visiting Europe.

The Commission said some of MasterCard’s “inter-bank fees and related practices may be anti-competitive”.

Visa is already under investigation in Europe over similar practices.

The European Commission is investigating MasterCard over fees charged for card transactions made by people visiting Europe

MasterCard, which said it would “fully co-operate” with regulators, could be fined up to $740 million, or 10% of its 2012 revenue, if found guilty.

The credit card firm said that it always aimed “to balance the interests of both consumers and retailers”.

The investigation will examine payments made by people from outside the European Economic Authority (EEA) – the EU’s 27-member states as well as Norway, Liechtenstein and Iceland – who use their credit and debit cards when inside the area.

The EU said the main aim of its probe was to ensure consumers were not harmed.

“When a US tourist uses a Mastercard to make a purchase in [the European Economic Area], these fees can be quite high, generally much higher than those paid in Europe,” European Commission spokesman Antoine Colombani said.

In 2007, a similar probe led to the Commission banning MasterCard from charging cross-border fees within the European Economic Area.

The European Commission said payment cards were of “crucial importance” for cross-border and internet payments.

“It is therefore a priority for the European Commission to prevent competition distortions in inter-bank arrangements on fees,” it said.

As well as inter-bank fees paid by cardholders from non-EEA countries, the Commission said the probe would look at rules that obliged merchants to accept all types of MasterCard cards, even if some of them incur higher charges.

The probe will also look at MasterCard’s restrictions on merchants who wish to use banks outside their own country, which could be cheaper.

“Ultimately, such behavior is liable to slow down cross-border business and harm EU consumers,” it said.

The European Commission said it would submit proposed regulation by the middle of the year on inter-bank fees aimed at ensuring a level playing field for all card providers.

Music web piracy does not harm legitimate sales, a new report published by the European Commission Joint Research Committee claims.

The Institute for Prospective Technological Studies examined the online habits of 16,000 Europeans.

They also found that freely streamed music provided a small boost to sales figures.

The International Federation of the Phonographic Industry (IFPI) said the research was “flawed and misleading”.

“It seems that the majority of the music that is consumed illegally by the individuals in our sample would not have been purchased if illegal downloading websites were not available to them,” wrote the researchers in their report, Digital Music Consumption on the Internet: Evidence from Clickstream Data.

“Although there is trespassing of private property rights (copyrights), there is unlikely to be much harm done on digital music revenues,” they added.

The team analyzed data over the course of one year.

Music web piracy does not harm legitimate sales, a new report published by the European Commission Joint Research Committee claims

They also found that music streaming services such as Spotify and Pandora gave a small boost to music sales.

“According to our results, a 10% increase in clicks on legal streaming websites lead to up to a 0.7% increase in clicks on legal digital purchases websites,” claimed the report.

However, the international music industry body the IFPI was highly critical of the research.

“The findings seem disconnected from commercial reality,” it said in a statement.

“If a large proportion of illegal downloaders do not buy any music (and yet consume, in some cases, large amounts of it), it cannot be logical that illegal behavior stimulates legal download sales and inflicts no harm.”

Microsoft has been fined 561 million euros ($731 million) for failing to promote a range of web browsers, rather than just Internet Explorer program, to users in the European Union.

It introduced a Browser Choice Screen pop-up in March 2010 as part of a settlement following an earlier EU competition investigation.

But Microsoft dropped the feature in a Windows 7 update in February 2011.

Microsoft said the omission had been the result of a “technical error”.

But competition commissioner Joaquin Almunia said the action was unprecedented, adding he wanted to deter any company from the “temptation” of reneging on such a promise.

In theory the watchdog could have fined the firm 10% of its global annual revenue, which would have totaled $7.4 billion based on its 2012 report.

“We take full responsibility for the technical error that caused this problem and have apologized for it,” a spokesman for Microsoft said following the announcement.

“We provided the Commission with a complete and candid assessment of the situation, and we have taken steps to strengthen our software development and other processes to help avoid this mistake – or anything similar – in the future.”

One lawyer said the ruling was also intended to send out a message to others.

“The European Commission is sending a firm signal in this first case of its type that it will not tolerate failure by a company to comply with the commitments it gave to settle an antitrust infringement procedure,” said Tony Woodgate from Simmons & Simmons.

“These <<commitments decisions>> are currently the European Commission’s favored mechanism to close abuse of dominance proceedings, saving enforcement resource and allowing for a speedy resolution.”

Microsoft has been fined 561 million euros for failing to promote a range of web browsers, rather than just Internet Explorer program, to users in the EU

The case dates back to 2007 when Opera – a Norwegian web-browser maker – complained Microsoft was stifling competition on PCs by bundling Internet Explorer with its operating system.

Microsoft initially argued that the move benefited users, but after the European Commission issued a preliminary report suggesting the firm had abused its position, the company agreed to offer a choice of browser until at least 2014 to avoid risking a fine.

However, this option was missing from its Windows 7 Service Pack 1 released in 2011 and it continued to be absent for 14 months.

During that time, Microsoft reported it was still complying with the agreement.

After the EU was alerted to the problem, it contacted Microsoft, which subsequently issued an apology suggesting its engineers had accidentally missed the issue.

It also acted to restore the facility. But the move was not enough to prevent an eight-month follow-up investigation by the commission into what punishment was needed.

At a press conference in Brussels, Joaquin Almunia said Microsoft’s lack of compliance represented a “serious breach” and was the first time a firm had failed to meet such a commitment.

He explained that he preferred negotiated settlements, rather than extended legal battles, when tackling competition complaints in the fast moving IT sector.

But he added that Microsoft’s willingness to co-operate with the EU’s subsequent investigation had acted as a mitigating factor when determining the level of the fine.

“I hope this will make companies think twice before they ever thinking of breaching their international obligations,” said the commissioner.

Microsoft’s chief executive Steve Ballmer and the former head of its Windows division Steven Sinofsky have already had their most recent bonuses docked, in part because of the browser affair.

The European Commission has said Spain, France and Portugal have failed to cut overspending to agreed targets.

Spain’s government deficit was 10.2% of the country’s economic output in 2012, well above the agreed 6.3% target, and will stay far above target into 2014.

Meanwhile, the Commission joined other major international organizations in admitting that the eurozone economy would contract in 2013.

It is forecast to shrink 0.3%, making the governments’ task even harder.

Previously, the Commission had expected the 17 economies in the eurozone would collectively enjoy 0.1% positive growth this year.

Delivering its winter forecast, Commission Vice-President Olli Rehn said that the eurozone was nonetheless expected to rebound in the last three months of this year, registering 0.7% growth in the fourth quarter.

The Commission is concerned about a “surprise” fall in Portugal’s economy, which fell 3.2% in 2012 and is forecast to contract by another 1.9% in 2013.

The European Commission joined other major international organizations in admitting that the eurozone economy would contract in 2013

Most economic forecasters have been revising down their European growth estimates, after the global economic recovery showed signs of faltering in the final quarter of 2012.

For example, in January the International Monetary Fund (IMF) said it expected the eurozone to fall into “mild recession” in 2013, having previously predicted growth.

It also predicted that the UK would grow 1% in 2013, compared with the 1.1% previously forecast.

The World Bank also revised down its global growth forecasts earlier in January.

But European Central Bank (ECB) president Mario Draghi believes the eurozone will begin recovering in the second half of this year.

And this week, Germany’s Bundesbank said Europe’s biggest economy would avoid recession and return to growth in the first quarter of 2013, after shrinking 0.6% in the last three months of 2012.

The European Union and the US will begin formal talks on a free-trade agreement, paving the way for the biggest trade deal in history.

European Commission President Jose Manuel Barroso made the announcement following President Barack Obama’s State of the Union address.

A deal would bring down trading barriers between the two biggest economies in the world.

EU-US trade is worth around 455 billion euros ($613 billion) a year.

Barack Obama announced US support for talks as part of his annual address to Congress on Tuesday, saying a free-trade deal would “boost American exports, support American jobs and level the playing field in the growing markets of Asia”.

In a joint statement, US and EU leaders said trade between the US and EU supported millions of jobs on both sides of the Atlantic.

“We are committed to making this relationship an even stronger driver of our prosperity,” the statement said.

The EU estimates that a “comprehensive and ambitious agreement” will boost annual GDP growth by 0.5%.

It is not clear how long the talks will take, but similar trade deals have involved years of negotiations.

The idea was discussed following the formation of a working group in 2011, and the formal talks may begin in the summer, EU Trade Commissioner Karel De Gucht said.

He said the deal would focus on bringing down remaining tariffs and other barriers to trade, and standardise technical regulations, standards and certifications.

The European Union and the US will begin formal talks on a free-trade agreement, paving the way for the biggest trade deal in history

Free trade between the US and the EU has been under informal discussion for years.

Previously politicians have been discouraged from pursuing free trade deals for fear of exposing domestic industries to greater competition from abroad.

But Steve Davies from the Institute of Economic Affairs, a think tank, said the economic crisis in Europe has injected more urgency into the talks.

“It’s happening now because there has been seriously depressed growth in the EU, and this will be good news for economic growth,” he said.

“On the American side, the critical factor is that Obama is now in his second term, so he doesn’t have the protectionist pressures from US businesses to worry about.”

Steve Davies said agriculture was likely to be particular area of contention, along with intellectual property, which could lead to political wranglings on both sides of the Atlantic.

European Commission President Jose Manuel Barroso made the announcement following President Barack Obama’s State of the Union address.

A deal would bring down trading barriers between the two biggest economies in the world.

EU-US trade is worth around 455 billion euros ($613 billion) a year.

Barack Obama announced US support for talks as part of his annual address to Congress on Tuesday, saying a free-trade deal would “boost American exports, support American jobs and level the playing field in the growing markets of Asia”.

In a joint statement, US and EU leaders said trade between the US and EU supported millions of jobs on both sides of the Atlantic.

“We are committed to making this relationship an even stronger driver of our prosperity,” the statement said.

The EU estimates that a “comprehensive and ambitious agreement” will boost annual GDP growth by 0.5%.

It is not clear how long the talks will take, but similar trade deals have involved years of negotiations.

The idea was discussed following the formation of a working group in 2011, and the formal talks may begin in the summer, EU Trade Commissioner Karel De Gucht said.

He said the deal would focus on bringing down remaining tariffs and other barriers to trade, and standardise technical regulations, standards and certifications.

The European Union and the US will begin formal talks on a free-trade agreement, paving the way for the biggest trade deal in history

Free trade between the US and the EU has been under informal discussion for years.

Previously politicians have been discouraged from pursuing free trade deals for fear of exposing domestic industries to greater competition from abroad.

But Steve Davies from the Institute of Economic Affairs, a think tank, said the economic crisis in Europe has injected more urgency into the talks.

“It’s happening now because there has been seriously depressed growth in the EU, and this will be good news for economic growth,” he said.

“On the American side, the critical factor is that Obama is now in his second term, so he doesn’t have the protectionist pressures from US businesses to worry about.”

Steve Davies said agriculture was likely to be particular area of contention, along with intellectual property, which could lead to political wranglings on both sides of the Atlantic.

The US Federal Trade Commission (FTC) has decided not to take legal action against Google at the end of a 19-month investigation into the search giant.

The FTC found Google had not biased its search results to favor its products.

Google has agreed to give advertisers access to more information about their campaigns and has agreed not to use other providers’ material such as product reviews in its search results.

Google is still awaiting a competition ruling from the European Commission.

Another key concession applies to how Google uses the patents it bought when it acquired Motorola Mobility last year for $12.5 billion.

Google has said it will charge “fair and reasonable” rates to companies that need to use its standard essential patents.

Standard essential patents are ones that are critical to industry standards, for example, the technology that allows devices such as smartphones and tablets to connect to the internet over Wi-Fi.

It has agreed not to take out injunctions forcing licensees to remove their products from sale if there are disagreements about how much a fair rate should be.

Rivals had called for stronger sanctions to be taken against Google.

Fairsearch, an organization representing several of Google’s critics such as Microsoft, said in a statement: “The FTC’s decision to close its investigation with only voluntary commitments from Google is disappointing and premature, coming just weeks before the company is expected to make a formal and detailed proposal to resolve the four abuses of dominance identified by the European Commission, first among them biased display of its own properties in search results.”

The FTC was asked to investigate whether Google was favoring its own products in search results.

Google has agreed to give advertisers access to more information about their campaigns and has agreed not to use other providers’ material such as product reviews in its search results

FTC chairman Jon Leibowitz told a press conference that the commission had found no evidence that Google’s search engine was biased towards its own services.

“Some may believe the commission should have done more, but for our part we do follow the facts where they lead,” he said.

“We do it with appropriate rigor. This brings to an end the investigation. It is good for consumers, it is good for competition and it is the right thing to do.”

One of the biggest changes to be implemented by Google will allow advertisers to copy ad campaign data to other search engines, such as Microsoft’s Bing.

Google is also promising that it will stop copying content from other websites to use in its summaries, even though the company had insisted the practice was legal under the fair-use provisions of US copyright law.

In response to the settlement, Google’s chief legal officer David Drummond said in a blog post: “The US Federal Trade Commission today announced it has closed its investigation into Google after an exhaustive 19-month review that covered millions of pages of documents and involved many hours of testimony.

“The conclusion is clear: Google’s services are good for users and good for competition.”

It does not mean that the search giant is out of the woods on the issue of anti-competitive practices.

Alongside the FTC investigation, Google is still under scrutiny from the European Union.

In December, the EU’s Competition Commission gave the search giant a month to address four key areas:

the manner in which Google displays “its own vertical search services differently” from other, competing products

how Google “copies content” from other websites – such as restaurant reviews – to include within its own services

the “exclusivity” Google has to sell advertising around search terms people use

restrictions on advertisers from moving their online ad campaigns to rival search engines

Google is expected to respond to these concerns shortly.

If found guilty of breaching EU anti-trust rules, Google would face a fine of up to $4 billion.

The EU commissioner for health, John Dalli, has resigned after an anti-fraud inquiry linked him to an attempt to influence tobacco legislation.

The EU’s anti-fraud office (Olaf) found that a Maltese businessman had tried to use his contacts with John Dalli, who is also Maltese, for financial gain.

This businessman had tried to influence future EU legislation on tobacco products, the European Commission said.

John Dalli categorically rejected the investigation’s findings, it added.

Commission Vice-President Maros Sefcovic will take over the John Dalli’s duties on an interim basis until a new commissioner of Maltese nationality is appointed, the commission said.

According to the commission, the tobacco producer Swedish Match complained in May that a Maltese entrepreneur had used his contacts with John Dalli to try to gain financial advantages from the company.

This entrepreneur had allegedly offered in return to influence a possible future legislative proposal on tobacco products, in particular on the EU export ban on snus, a smokeless tobacco taken orally.

No transaction was concluded between the company and the entrepreneur and no payment was made, the commission said.

Olaf “did not find any conclusive evidence of the direct participation of John Dalli but did consider that he was aware of these events”, it said.

John Dalli, 64, became the EU’s commissioner for health and consumer policy in 2010

According to the commission, the case has not affected its decision-making process.

It said that the Olaf’s final report and its recommendations were being sent to the attorney-general of Malta, and it was up to the Maltese judiciary to decide how to proceed.

John Dalli, 64, became the EU’s commissioner for health and consumer policy in 2010.

His official biography shows that his career in Maltese politics stretches back more than a quarter of a century.

First elected an MP in 1987 for the centre-right Nationalist Party, he was a cabinet minister in several governments, serving as finance minister three times.

Snus

• A moist tobacco which is placed under the lip

• Produced in various flavors, including liquorice, lemon, coffee, aniseed, elderflower, cranberry and mint

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